NEW YORK — Wal-Mart is bringing back something its customers have been asking for since the Great Recession: layaway.
The world’s largest retailer, which ditched the pay-as-you-go plans in 2006, is rolling out a holiday layaway plan from Oct. 17 through Dec. 16. Wal-Mart is following rivals that brought back the service during the thick of the recession.
Wal-Mart is introducing its layaway option at a time when its mostly low-income shoppers are being squeezed by high unemployment and rising costs. The discounter also is trying to reverse nine straight quarters of revenue declines at its namesake U.S. stores open at least a year — a key measure of a retailer’s health.
“We’re always looking for ways to ease budget strain for our customers, and we know this holiday season brings with it additional financial pressure,” said Duncan MacNaughton, chief merchandising officer at Wal-Mart’s U.S. division. “This was a key component that our customers asked us for.”
Layaway — which allows shoppers to pay over time, interest-free, and pick up their merchandise when it is paid in full — became popular during the Great Depression. The practice became largely a thing of the past as the economy flourished and consumers were feeling more confident. But when credit dried up and the job market soured during the recession that began in late 2007, Sears and other merchants added back or expanded the service.
Citing increased costs and lower customer demand, Wal-Mart phased out its layaway program in September 2006 — roughly a year before the recession began — with the exception of fine jewelry. But the discounter faced criticism because it built its reputation on helping low-income shoppers.
Wal-Mart Stores Inc., based in Bentonville, Ark., said it will be able to limit costs now by limiting the layaway program to toys and electronics with a price tag of $15 or more. It also added a $5 nonrefundable service fee and $10 cancellation charge for any orders not picked up by Dec. 16 or canceled by the customer.
The program, which has a minimum layaway purchase of $50, is available only at stores. It also requires a 10 percent down payment. The company said it may extend the program throughout the year if it is successful.
The layaway plan is part of Wal-Mart’s efforts to turn around its struggling U.S. business. Wal-Mart said it will launch price cuts Monday on dozens of holiday toys to $15. The company also said it will start offering small samples of holiday merchandise, including outdoor decor, later this month — two weeks earlier than a year ago.
These moves are just the latest efforts by Wal-Mart to revive sales. Wal-Mart has been going back to “everyday low prices” instead of focusing on pricing gimmicks such as temporarily slashing prices on select items that caused some shoppers to go elsewhere. It also is finishing up restocking thousands of items it cut during an overzealous bid to clean up its stores.
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